What is the best way to reduce inflation and create jobs under these conditions?
The best solution is an interest rate proportionate to inflation to help us to control inflation. We would then be able to reduce the interest rate by decreasing inflation because banks will have more resources to put at the disposal of applicants. However, the current practice of granting bank facilities to enterprises at a minus 10% interest rate is only transfer of economic rent. This rent will encourage investors, who have no economically feasible plan to offer, to apply for facilities and such facilities will not be spent on production, but will enter other markets. This would damage both the economy and production. As a result, the existing plan cannot be considered efficient and will only worsen inflation.
